Why Tax Incentives Matter
See our Frequently Asked Questions page for examples of economic development tax incentives and how these policies affect businesses and state budgets.
How We Conduct Our Work
We study the policies and practices states have used to generate much-needed answers about the budget risks and economic returns of tax incentives. Based on this research, we work with leaders in selected states to advance policies that:
- Protect budgets from unexpected tax incentive costs;
- Evaluate all tax incentives on a regular schedule; and
- Inform lawmakers’ policy choices with evidence from evaluations.
Evaluating State Tax Incentives
The LATEST from the Project
Creating jobs and boosting local economies are of primary importance to legislators in virtually every state. Yet lawmakers too often rely on incomplete, conflicting or anecdotal evidence when deciding whether to adopt and maintain tax incentives to spur economic development. Indiana is poised to take a major step toward ensuring effective evaluation of the state’s tax incentives with the Indiana Economic Development Tax Incentives Evaluation Act (House Bill 1020). more
High-quality evaluations of tax incentives help policymakers understand whether the program is achieving its purpose, how its performance compares to other economic development strategies, and how its return on investment might be improved. more
By integrating the evaluation of tax incentives into the policymaking process, states can ensure that incentives are regularly reconsidered. more
To determine whether a tax incentive program is working, state lawmakers need evaluations that analyze the extent to which incentives have influenced businesses' choices, how those decisions affected the state's economy, and the price paid to get those results. more
Nebraska is making important progress toward understanding how its tax incentive programs for business compare with other states. more